1

Filed 8/29/22

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

KENNETH HALE et al.,

Petitioners and Appellants,

v.

CALIFORNIA PUBLIC 

EMPLOYEES’ RETIREMENT 

SYSTEM,

Defendant and Respondent.

 A161758

 (City & County of San Francisco 

 Super. Ct. No. CPF18516340)

After Kenneth Hale and Robert Wolf retired from public service, they 

sought to have California Public Employees’ Retirement System (CalPERS) 

include in their pension calculations “cash-outs” they received for accrued 

holiday leave credits. CalPERS declined to do so, and the trial court upheld 

its decision. Hale and Lavonne Wolf (the heir of Robert Wolf, who is now 

deceased) have appealed the judgment. We reverse.

FACTUAL AND PROCEDURAL BACKGROUND

Hale and Wolf were both firefighters with California’s Department of 

Forestry and Fire Protection (Cal Fire), and for the last ten years of their 

careers both served as executive officers for Cal Fire Local 2881 (Local 2881 

or the union). The union is the exclusive bargaining representative for 

firefighters, fire captains, and other fire control employees of Cal Fire in 

State Bargaining Unit 8. Agreements between Bargaining Unit 8 and the 

State of California and Cal Fire (the Agreements) allowed the president of 
2

the union and one other designee (the latter usually the rank and file 

representative; collectively, the union officers), to be released from their 

normal work duties in order to conduct union business full-time. The 

Agreements specified the release “shall result in no loss of compensation 

(salary or benefits).”

In lieu of normal holidays (New Year’s Day, Thanksgiving, etc.), 

members of Local 2881 receive floating holidays with pay, accrued on the day 

of the pre-existing holiday. The holiday credits may be used at another time; 

for instance, a firefighter who normally works on Thursdays would not have 

Thanksgiving off without making special arrangements, but would on 

Thanksgiving accrue a floating holiday. As a general matter, the Agreements 

allow employees to “cash out” up to four holidays per year only if funds are 

available, and they may not carry over more than six holidays from one 

calendar year to the next. However, for the union officers the Agreements

provide that once a year, Cal Fire will buy down their leave credits to either 

“the normal carry-over maximum” or the amount the person had when

entering office, whichever is higher. These mandatory buy downs, or cashouts, are at the heart of the dispute before us.

Wolf became a firefighter in 1978. He was elected president of Local 

2881 in 2002 and held that position until his retirement in 2012. Hale began 

working for Cal Fire in 1968. In 2004 he was elected the union’s state rank 

and file director and held that position until he retired in 2013. 

During that time, Hale and Wolf were on full-time leave from their 

firefighting positions, but they remained Cal Fire employees and their pay 

was determined by their rank in Cal Fire. Both of them were promoted to the 

rank of battalion chief during their tenure as union officers. 
3

Firefighters at Cal Fire normally work a 72-hour workweek, in the 

form of three consecutive 24-hour shifts. While they were union officers, Hale 

and Wolf still reported three 24-hour days, for a 72-hour week, in the same 

way active firefighters reported their time, but, as we shall explain, this did 

not reflect their actual or intended work schedule. 

Hale testified that his responsibilities included negotiating the union 

contracts and handling violations of the contracts, adverse actions against 

employees, and accident investigations. He was not permitted to work on 

fires. Cal Fire’s union office is open from 8:00 in the morning until 4:30 in 

the afternoon. Hale was generally in the office from 9:00 in the morning until 

6:30 or 7:00 in the evening on weekdays, but he would speak with members of 

the bargaining unit seven days a week and on occasion he would go to the 

office on weekends. He was expected to work every day while he was a union 

officer, and his holidays, such as Christmas and the Fourth of July, were 

sometimes interrupted, as was a trip to Hawaii with his wife. He recalled 

one Thanksgiving when his family had a large gathering at their home, and 

he had to spend eight hours on the telephone in response to an incident at the 

site of a fire. He would receive work-related phone calls on weekends “with 

some regularity” and sometimes in the middle of the night, and he was 

expected to answer the phone. 

Hale did not take any holidays off during his tenure as a union officer, 

and no one at Cal Fire expressed any concern that he was not using any of 

his holiday credits. He was told the position meant he was on duty 365 days 

a year, 24 hours a day. If he had turned off his phone and taken a holiday, he 

testified, he would have been fired. While he was a union officer, Cal Fire 

“cashed out” Hale’s holiday leave credits by issuing a check to reflect the 

amount of his accrued leave. He would have preferred not to have the leave 
4

cashed out, but he was told he had no option. When he retired in 2013, all of 

his remaining holiday credits were cashed out. 

Wolf testified that, as president of the union, he acted effectively as the 

chief executive officer, meeting with the district vice presidents regularly; 

making sure the union operations complied with applicable laws, procedures, 

and policies; sitting on the board of directors of the California Professional 

Firefighters; supervising the 237 elected union officials in the state; 

managing day-to-day-operations; maintaining the union’s political operation; 

interacting with Cal Fire management; and managing the training program 

for union officers. Although he reported a standard workweek of three 24-

hour shifts, in fact he worked far more than that. He worked in the office five 

days a week, and he did not take regular days off. There was never a day 

that he did not receive telephone calls, and he routinely was on his cell phone 

five hours a day. He did not think he had the option to turn his phone off. 

Wolf did not take a holiday during the ten years he was the union 

president. No one ever questioned why he had not taken holidays. Cal Fire 

cashed out Wolf’s unused holiday leave credits, whether he wanted that or 

not. 

During years Wolf and Hale were union officers, Cal Fire (although 

somewhat inconsistently) bought down their holiday leave credits, Wolf’s to 

the amount he brought into office and Hale’s to six holidays, the normal 

carry-over maximum. The cash-outs were not reported to CalPERS as 

income to be included in pension calculations, and the union officers did not 

make any contributions from those amounts. 

After Hale and Wolf retired, the union asked CalPERS to include the 

amounts they received in the cash-outs when calculating their final 

compensation, part of the formula on which pension benefits are based. 
5

CalPERS concluded the buy downs were not “compensation earnable” 

as defined by the Public Employees’ Retirement Law. (Gov. Code, § 20000 et 

seq. (PERL); see §§ 20630, subd. (b), 20636.)1 The union officers appealed 

this determination. 

The matter proceeded to an administrative hearing. Ultimately, after 

proceedings we need not detail here, an administrative law judge (ALJ) 

issued a proposed decision concluding the cash-outs were not “compensation 

earnable” and therefore should not be included in Hale and Wolf’s final 

compensation for purposes of calculating their monthly retirement 

allowances. CalPERS’s board adopted the ALJ’s proposed decision as its final 

decision. 

Hale and Wolf then filed a petition for writ of administrative 

mandamus. (Code Civ. Proc., § 1094.5.) The trial court denied the petition, 

and Hale and Wolf have appealed. 

DISCUSSION

I. Standard of Review

Where, as here, an administrative mandamus action affects a vested, 

fundamental right to receive a pension benefit in an amount specified by law, 

the trial court exercises independent judgment when reviewing the evidence 

admitted at the administrative hearing to determine whether it supports 

CalPERS’s findings regarding the amount of pension benefits. (Molina v. 

Board of Administration, etc. (2011) 200 Cal.App.4th 53, 60–61 (Molina).) 

On appeal, we review the trial court’s factual findings for substantial 

evidence, viewing the facts in the light most favorable to the prevailing party. 

(Molina, supra, 200 Cal.App.4th at p. 61.) Questions of law are subject to de 

novo review on appeal, bearing in mind that “where our review requires that 

1 All undesignated statutory references are to the Government Code.
6

we interpret the PERL or a PERS regulation, the court accords great weight 

to PERS[’s] interpretation.” (Prentice v. Board of Administration (2007) 157 

Cal.App.4th 983, 989 (Prentice).) In carrying out this review, we construe 

ambiguous or uncertain provisions of the PERL liberally in favor of the 

pensioner. (City of Fremont v. Board of Administration (1989) 214 

Cal.App.3d 1026, 1033.)

II. Statutory and Regulatory Background

The PERL establishes CalPERS, a prefunded, defined benefit pension 

plan for state employees and employees of participating local public agencies. 

(Oden v. Board of Administration (1994) 23 Cal.App.4th 194, 198.) An 

employee’s pension is determined by a formula that takes into account the 

employee’s age at retirement, number of years of service, and final 

compensation. (Ibid.) CalPERS is funded by employer and employee 

contributions that are calculated as a percentage of the employee’s 

compensation. (Ibid.)

“ ‘Under the PERL, the determination of what benefits and items of pay 

constitute “compensation” is crucial to the computation of an employee’s 

ultimate pension benefits. The pension is calculated to equal a certain 

fraction of the employee’s “final compensation” which is multiplied by a 

fraction based on age and length of service. [Citations.] “Final 

compensation” is the “highest average annual compensation earnable by a 

member during [a specified] period.” ’ ” (Prentice, supra, 157 Cal.App.4th at 

p. 989; accord, Molina, supra, 200 Cal.App.4th at p. 64; see § 20630, 

subd. (b).)

The statutory scheme defines a number of the terms pertinent to this 

dispute. “ ‘Compensation earnable’ ” means “the payrate and special 

compensation of the member . . .” (§ 20636, subd. (a).) “ ‘Payrate’ ” is “the 
7

normal monthly rate of pay or base pay of the member paid in cash . . . for 

services rendered on a full-time basis during normal working hours, pursuant 

to publicly available pay schedules.” (§ 20636, subd. (b)(1).) And “ ‘[s]pecial 

compensation’ ” includes “payment received for special skills, knowledge, 

abilities, work assignment, workdays or hours, or other work conditions.” 

(§ 20636, subd. (c)(1).) However, it is limited to amounts received by 

“similarly situated members of a group or class of employment.” (§ 20636, 

subd. (c)(2).)2 

The statute provides a separate definition of special compensation for 

“state members,” which it is undisputed Hale and Wolf were. For them, 

special compensation specifically includes, inter alia, “[c]ompensation for 

performing normally required duties, such as holiday pay, bonuses (for duties 

performed on regular work shift), educational incentive pay, maintenance 

and noncash payments, out-of-class pay, marksmanship pay, hazard pay, 

motorcycle pay, paramedic pay, emergency medical technician pay, Peace 

Officer Standards and Training (POST) certificate pay, and split shift 

differential.” (§ 20636, subd. (g)(3)(B).) Excluded from the scope of 

“ ‘[p]ayrate’ ” and “ ‘[s]pecial compensation’ ” for state members are

“[c]ompensation for additional services outside regular duties, such as 

standby pay . . . and bonuses for duties performed after the member’s regular 

work shift.” (§ 20636, subd. (g)(4)(I).)

2 Subdivision (c)(2) of section 20636 (somewhat ungrammatically)

provides: “Special compensation shall be limited to that which is received by 

a member pursuant to a labor policy or agreement or as otherwise required 

by state or federal law, to similarly situated members of a group or class of 

employment that is in addition to payrate. If an individual is not part of a 

group or class, special compensation shall be limited to that which the board 

determines is received by similarly situated members in the closest related 

group or class that is in addition to payrate, subject to [specified limitations].”
8

A “ ‘group or class of employment’ ” is defined as “a number of 

employees considered together because they share similarities in job duties, 

work location, collective bargaining unit, or other logical work-related 

grouping. A single employee is not a group or class.” (§ 20636, subd. (e)(1).) 

It has been held that an employee may not be a member of more than one 

group or class. (Prentice, supra, 157 Cal.App.4th at p. 993.)

The statutory scheme directs the board of CalPERS to promulgate 

regulations delineating more specifically and exclusively what constitutes 

“ ‘special compensation.’ ” (§ 20636, subd. (c)(6).) Pursuant to this 

authorization, CalPERS promulgated Section 571 of Title 2 of the California 

Code of Regulations (rule 571). (DiCarlo v. County of Monterey (2017) 12 

Cal.App.5th 468, 481–482 (DiCarlo).) Subdivision (a) of rule 571 contains a 

list that “exclusively identifies and defines special compensation items for 

members employed by contracting agency and school employers that must be 

reported to CalPERS if they are contained in a written labor policy or 

agreement.” (Italics added.) The list includes “Holiday Pay,” defined as 

“[a]dditional compensation for employees who are normally required to work 

on an approved holiday because they work in positions that require scheduled 

staffing without regard to holidays. If these employees are paid over and 

above their normal monthly rate of pay for approved holidays, the additional 

compensation is holiday pay and reportable to PERS.” (Rule 571, 

subd. (a)(5).) Subdivision (b) contains standards for evaluating special 

compensation under subdivision (a);3 subdivision (c) provides that only items 

3 Specifically, subdivision (b) of rule 571 recites that CalPERS’s board 

has determined that the items of special compensation listed in subdivision 

(a) are contained in a written labor policy or agreement provided certain 

requirements are met; are available to all member in the group or class; are 

part of normally required duties; are performed during normal hours of 
9

listed in subdivision (a) have been affirmatively determined to be special 

compensation and that they are subject to review for conformity with 

subdivision (b)’s standards; and subdivision (d) provides that if an item of 

special compensation is not listed in subdivision (a) or is out of compliance 

with subdivision (b)’s standards, it may not be used to calculate final 

compensation. The parties disagree as to whether rule 571 applies to the 

union officers, who are state members rather than members employed by a 

contracting agency or school. 

III. ALJ and Trial Court Decisions

The ALJ declined to include the holiday pay in Hale and Wolf’s final 

compensation, citing first a requirement that, to be special compensation, the 

holiday leave credit cash-outs must have been available to all members of 

their group or class of employment. (See § 20636, subds. (c)(2), (e)(1).) This 

requirement, the ALJ concluded, was not satisfied. The number of cash-outs 

Hale and Wolf received was not available to other members of their 

bargaining unit, who may cash out only four holidays a year and only if funds 

are available for the cash-out, which they appear not to have been.4 Hale and 

Wolf sought to be treated as a separate class or group, but the ALJ rejected 

their effort: “Although [Hale and Wolf] both worked as union officers at the 

same office location in Sacramento, and though they were not eligible for 

certain types of compensation available to other members of Bargaining Unit

employment; are paid periodically as earned; are historically consistent with 

prior payments for the job classification; are not paid exclusively in the final 

compensation period; are not final settlement pay; and do not create an 

unfunded liability above PERS’s actuarial assumptions.

4 At an administrative hearing, CalPERS’s counsel told the board that 

these four days of cash-outs would have been “pensionable” if the rest of the

firefighters had been allowed to take them, but that Cal Fire never allowed 

anyone else to cash out their holiday pay. 
10

8, such as overtime pay, they had much in common with other members. 

They retained the rights and promotional opportunities of other members of 

Bargaining Unit 8. [They] were paid and promoted during their time as 

union officeholders consistent with their classification with Cal Fire. The fact 

that [they] worked in the same union offices in Sacramento exclusively on 

union matters, and that they worked roughly similar hours without eligibility 

for overtime pay, does not establish that [they] were a group or class of two, 

or that they left their classification as firefighters when they became union 

officers.” 

The trial court accepted this reasoning, noting that Wolf and Hale’s 

duties as union officers differed from each other, “Mr. Wolf engag[ing] in 

executive functions while Mr. Hale’s work was more ‘hands on’ ”; that both 

were members of Bargaining Unit 8 and were compensated based on their 

ranks as battalion chiefs; and that the Agreements guaranteed “ ‘no loss of 

compensation (salary o[r] benefits)’ ” during their full-time release as union 

officers. The court concluded that grouping them “according to their rank 

and bargaining unit/compensation makes eminent sense and the Court 

cannot conclude that [CalPERS] acted arbitrarily.” 

The ALJ also rejected Hale and Wolf’s argument that the holiday cashouts were special compensation under rule 571, which includes among items 

of special compensation holiday pay, defined as “[a]dditional compensation 

for employees who are normally required to work on an approved holiday 

because they work in positions that require scheduled staffing without regard 

to holidays.” (Rule 571, subd. (a)(5).) According to the ALJ, Hale and Wolf 

had “established they were required to work on holidays in order to respond 

to the needs of union members,” but not that this was required because of the 

need for scheduled staffing on holidays. That is, according to the ALJ, Hale 
11

and Wolf “handled issues during holidays as needed, as the issues arose, 

without regard to scheduling.” 

The trial court accepted this reasoning as well, concluding the record 

supported a determination that the union officers did not work in positions 

that required scheduled staffing for purposes of rule 571. The court also 

upheld the finding that their holiday work is best characterized as 

unpensionable standby pay within the meaning of section 20636, 

subdivision (g)(4)(I), noting that the union offices were closed on weekends 

and holidays; that Hale had testified that if he were unavailable when a 

union member called, the member would have to wait; that they worked 

about half the weekends and holidays; and that Hale went on vacation to 

Hawaii and once planned a large Thanksgiving dinner, belying the claim that 

Hale and Wolf were required to work on a holiday with scheduled staffing. 

These factors suggested, according to the court, that they were instead

working “ ‘on-call’ or ‘stand-by.’ ” 

As an alternative basis for its decision, the trial court ruled the cashouts were not special compensation for purposes of rule 571 because they 

were not reported to CalPERS as required by that rule. (Rule 571, subd. (a).) 

IV. Analysis

1. Pay for Required Duties

The first question we consider is whether rule 571 applies to this 

dispute at all. It appears that all parties assumed its applicability both 

during the administrative proceedings and in the trial court. On appeal, 

Hale and Wolf raise a new argument: that rule 571 does not govern this case 

because by its terms it applies only to members employed by contracting 

agency and school employers, not to those employed by the State. Because 

this is a pure question of law and there is no material dispute about the facts, 
12

we may consider this question now. (See Henderson v. Pacific Gas & Electric 

Co. (2010) 187 Cal.App.4th 215, 225–226; Howard S. Wright Construction Co. 

v. BBIC Investors, LLC (2006) 136 Cal.App.4th 228, 242, fn. 13.) 

 Rule 571’s definition of special compensation items is expressly limited 

to “members employed by contracting agency and school employers,” rather 

than to state employees. (Rule 571, subd. (a).) Subdivision (b) of the rule, 

setting forth standards for evaluating items of special compensation, and all

the remaining subdivisions of Rule 571 refer back to subdivision (a). (Id. 

subds. (b), (c), & (d).) 

 The rulemaking history set forth in DiCarlo sheds light on the reasons 

local agencies and schools in particular are subject to these precisely 

delineated standards. Rule 571 was implemented in response to concerns 

about local agencies engaging in “pension spiking” by adding to the items 

reported as special compensation. (DiCarlo, supra, 12 Cal.App.5th at p. 486; 

accord, Tanner v. Public Employees’ Retirement System (2016) 248 

Cal.App.4th 743, 756 [predecessor to § 20636 enacted as part of bill to 

address local contracting agencies’ recently uncovered practice of 

intentionally inflating employees’ final compensation].) The DiCarlo court 

explained that the history of rule 571 “demonstrates that it was 

implemented” to “ ‘allow local agency and school district employers to report 

only those items of special compensation that are delineated in regulations 

adopted by the Board [of Administration]. [¶] Proposed Section 571 would 

provide an all-inclusive list of special compensation items that must be 

reported for local agency and school district employees, if authorized by 

written labor policy or agreement. Section 571 would set forth the standards 

followed by the Board in determining whether or not items of special 

compensation qualified for inclusion in the list.’ ” (DiCarlo, at p. 486.) 
13

The structure of section 20636 likewise suggests that state workers on 

the one hand, and local agency and school district workers on the other hand, 

may be subject to different standards for purposes of measuring special 

compensation. The directive that CalPERS promulgate rule 571 is found in 

subdivision (c), which defines the compensation of members in general, but 

another portion of the statute, subdivision (g), provides that 

“[n]otwithstanding subdivision (c), ‘special compensation’ for state members” 

includes, inter alia, “[c]ompensation for performing normally required duties, 

such as holiday pay.” (§ 20636, subd. (g)(3) & (g)(3)(B), italics added.) 

This authority leads us to conclude rule 571 does not control whether 

Hale and Wolf’s holiday cash-outs were special compensation. To the extent

the administrative and trial court decisions rest on a finding that Hale and 

Wolf did not work in positions that required scheduled staffing without 

regard for holidays for purposes of rule 571’s definition of holiday pay, they 

are thus on shaky ground. That is particularly so because the ALJ 

specifically found that Hale and Wolf’s positions did require them to work on 

holidays; the reason the ALJ concluded the holiday pay was not special 

compensation was that the need for holiday work did not arise from the need 

for scheduled staffing—a requirement found only in rule 571. Without 

engaging in lengthy analysis, the trial court found no abuse of discretion in 

this conclusion. 

Without rule 571’s limitations, it is difficult to square this conclusion

with subdivision (g) of section 20636, which defines key terms as applied to 

state members only. For those members, “ ‘special compensation’ ” includes

“[c]ompensation for performing normally required duties, such as holiday pay

. . . .” (§ 20636, subd. (g)(3)(B), italics added.) The record fully supports the 

finding that responding to the needs of union members whenever calls came 
14

in—on holidays or otherwise—was one of Hale and Wolf’s normally required 

duties. Thus, payments the two men received to cash out their holiday leave 

credits was compensation for performing their normal duties and met the 

statutory definition of “ ‘special compensation’ for state members.” (§ 20636, 

subd. (g)(3).)

At oral argument, CalPERS suggested that, even if section 571 is not 

directly applicable, we should be guided by its definition of “holiday pay” in 

considering the meaning of that term for state members. But the precise 

issue before us is not whether the cash-outs are “holiday pay” under any 

given definition; it is whether they are “special compensation.” As to state 

workers, the Legislature has determined that one form of special 

compensation is “[c]ompensation for performing normally required duties,” 

with holiday pay as one example. (§ 20636, subd. (g)(3)(B).) Our decision 

rests on the fact that Hale and Wolf’s work on holidays was a part of their

normally required duties, not on any particular definition of “holiday pay.” 

Disputing this result, CalPERS relies on City of Pleasanton v. Board of 

Administration (2012) 211 Cal.App.4th 522 (City of Pleasanton) to argue the 

union officers were at best “ ‘on-call’ ” or “ ‘on stand-by’ ” during holidays and

weekends, but that case is readily distinguishable. The question there was 

whether a portion of the compensation of a division chief in a city fire 

department—something called “ ‘standby pay’ ” in his labor agreement—

should be considered special compensation for purposes of his CalPERS 

retirement allowance. (City of Pleasanton, at p. 526.) The division chief

worked a standard 40-hour workweek, Monday through Friday, and was off 

work on the city’s regular holidays, but he was assigned to a back-up 

schedule requiring him to be available to report for emergencies, as 

necessary, during certain times. (Id. at pp. 526–527.) The fire department’s 
15

compensation plan granted division chiefs with a standby schedule an 

additional 7.5 percent of their salary in “ ‘Standby Pay.’ ” (Id. at p. 527.) In 

administrative proceedings, CalPERS concluded the standby pay did not 

constitute special compensation because it was paid for services rendered 

outside the employee’s normal working hours, and it could not be construed 

as holiday pay, training premium pay, or shift differential pay. (Id. at 

p. 529.) 

The trial court granted the employee’s petition for writ of mandate, and 

the Court of Appeal reversed. (City of Pleasanton, supra, 211 Cal.App.4th at 

pp. 525, 530–531.) In so doing, it pointed to the evidence that the 7.5 percent 

pay increment was intended to compensate division chiefs for assigned duties 

in excess of their normal 40-hour workweek, at times the employee testified

he was “ ‘pretty much on call.’ ” (Id. at pp. 537–538.) The appellate court 

rejected the employee’s contention that the times he was required to be 

available as a backup division chief were part of his “ ‘normal working 

hours,’ ” because unless called in, the employee could be at home every 

evening during the week and all day on weekends and holidays, and the 

record did not disclose how frequently or infrequently he had to work during 

those times. (Id. at p. 538.) In the court’s view, the 7.5 percent pay 

increment was better characterized as compensation for being available to 

work on a standby basis outside his normal working hours, rather than 

compensation for working during normal working hours. (Id. at p. 539.) The 

court also went on to conclude the compensation did not qualify as holiday 

pay for purposes of rule 571, explaining that although the employee might 

occasionally have to work on a holiday if he was on backup and was called in 

to relieve someone else, he was not “ ‘normally required to work’ on holidays.” 

(City of Pleasanton, at p. 540.)
16

The situation here is fundamentally different from that in City of 

Pleasanton. Hale and Wolf were required to work on holidays, and there is 

ample evidence that they were routinely required to carry out their duties as 

union officers regardless of the day of the week or whether it was a holiday. 

They did not, unlike the petitioners in City of Pleasanton, work a standard 

40-hour per week schedule. (Compare City of Pleasanton, supra, 211 

Cal.App.4th at p. 538.) The trial court expressed skepticism that neither 

employee was able to take a holiday off during their ten years as union 

officers, but there is no indication Cal Fire ever questioned Hale or Wolf’s 

accounting of their work time. Ironically, part of the evidence CalPERS uses 

in an attempt to show they were able to take holidays off is the example that 

Hale had to spend much of a Thanksgiving Day, when he had hoped to enjoy 

a gathering at his home, on the telephone dealing with an emergency. At 

most, that example cuts both ways, and it does not show the officers could 

regularly take holidays free of work obligations. In any event, City of 

Pleasanton involved the employee of a local agency, rather than a state

member, so the stricter standard of Rule 571 governed in that case. (Id. at 

p. 525.)

2. Available to All Members

As a separate basis for rejecting Hale and Wolf’s claim that the holiday 

cash-outs were special compensation, the ALJ explained that the cash-outs

were not available to all members of their group or class of employment: 

although Hale and Wolf worked as union officers in the same office in 

Sacramento and were not eligible for certain types of compensation available 

to other members of Bargaining Unit 8, they had other things in common 

with members of their unit. For instance, they retained the same rights and 

promotional opportunities as other members of the bargaining unit, and they 
17

were paid and promoted consistent with their classification with Cal Fire. 

Rejecting Hale and Wolf’s attempt to characterize themselves as their own 

group or class of two, the ALJ explained that they did not lose their 

characterization as firefighters when they became union officers and that an 

employee may be a member of only one group or class. (See Prentice, supra, 

157 Cal.App.4th at p. 993.) The trial court did not fault this analysis, 

concluding it made “eminent sense” to decline to treat Hale and Wolf as a 

class of two. 

We do not dispute the characterization of Hale and Wolf’s “group or 

class” as Bargaining Unit 8, but we are not persuaded that ends the inquiry. 

One of the limitations on special compensation is that it be received by 

“similarly situated members of a group or class of employment.” (§ 20636, 

subd. (c)(2), italics added.) The ALJ and the trial court effectively wrote the 

italicized words out of the statute, concluding qualifying special 

compensation must be available to “all members of their group or class of 

employment.”5 But if there is one thing this record makes clear, it is that 

Hale and Wolf’s situation was different from that of other members of 

Bargaining Unit 8. They were the only two firefighters serving as union 

officers at the time; they worked in a different location from other members; 

they were not allowed to carry out firefighting duties; they were not eligible 

for overtime; and their work schedule differed from other members of the 

unit. Their different situation was recognized in the Agreements, which 

treated their holiday pay cash-outs and carry-over differently than that of 

other members of the bargaining unit. 

5 That may be in part because rule 571, which we have concluded does 

not apply to state members, lacks the “similarly situated” language in its 

recitation of what qualifies as special compensation. (Compare § 20636, 

subd. (c)(2) with Rule 571, subd. (b)(2).)
18

As Hale and Wolf point out, the record shows that the holiday cash-outs 

are not the only item of special compensation that is not available to all

members of the bargaining unit at any given time, but only to those whose 

job duties require it. For instance, for state members, one item of special 

compensation for performing normally required duties is hazard pay 

(§ 20636, subd. (g)(3)(B)), but under the Agreements a “HAZMAT” incentive 

is available only to Unit 8 members assigned to a HAZMAT response unit on 

a full-time basis, or other employees at the discretion of the Unit Chief. And 

under the Agreements, paramedics in certain job classifications are entitled 

to an annual “pay differential” not available to those who do not serve in 

those paramedic classifications, a differential that is treated as compensation 

for purposes of retirement contributions. We are not persuaded that the 

union officers’ holiday cash-outs must be available to all members of Unit 8, 

regardless of the duties of their particular assignment—put another way, 

regardless of whether they are similarly situated—to be considered special 

compensation for purposes of section 20636.

We are mindful of the general rule that we accord great weight to 

CalPERS’s interpretation of the PERL and its own regulations, unless clearly 

erroneous. (Prentice, supra, 157 Cal.App.4th at p. 989.) But we may not 

abdicate our duty to apply our independent judgment to legal issues. (See 

Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 8.) 

We accord greater weight to a consistent interpretation, particularly if longstanding, and we do not defer to one that is “ ‘vacillating.’ ” (Id. at p. 13.) 

The parties draw our attention to no consistent or long-standing 

determination by CalPERS either that state members are subject to the 

limitations of rule 571 or that, independent of rule 571, holiday cash-outs in 

the circumstances before us are not properly included in pension calculations.
19

Indeed, a recent nonprecedential decision by CalPERS, concluding in a 

different factual context that rule 571 does not apply to state members,

suggests the opposite.6 Thus, the general rule of deference does not assist 

CalPERS in this case. 

The facts before us are largely undisputed. On this record, we conclude 

as a matter of law that Hale and Wolf’s holiday cash-outs were special 

compensation and must be included in calculating their pensions.7

DISPOSITION

The judgment is reversed. The trial court is directed to issue a new 

order granting Hale and Wolf’s petition for writ of administrative mandamus.

Appellants shall recover their costs on appeal.

TUCHER, P.J.

WE CONCUR:

FUJISAKI, J.

PETROU, J.

Hale et al. v. California Public Employees’ Retirement System (A161758)

6 We grant the request of Hale and Wolf for judicial notice of this 

decision, In the Matter of the Appeal Regarding the Final Compensation 

Calculation of Thomas Blanco and Department of Corrections and 

Rehabilitation, Respondents, Agency Case No. 2020-1209, OAH Case 

No. 2021030825, April 25, 2022. Although the decision is of limited value, 

both because it is not precedential and because it was not before the trial 

court—and it is not necessary to our decision—it indicates CalPERS has 

taken inconsistent positions on whether state members are subject to rule 

571. 

7 We do not address whether Hale and Wolf’s pension contributions 

must be adjusted retroactively. CalPERS makes no claim on appeal that Cal 

Fire’s failure to report Hale and Wolf’s holiday cash-outs in a timely manner 

provides an independent basis to exclude these amounts from their pension 

calculations.
20

Trial Court: City and County of San Francisco Superior Court

Trial Judge: Hon. Ethan P. Schulman

Counsel: Messing Adam & Jasmine, Gary M. Messing, Gregg 

McLean Adam and Lian Balciunas Cockrell for 

Petitioners and Appellants

Matthew G. Jacobs, General Counsel, California Public 

Employees’ Retirement System, Elizabeth Yelland 

Assistant Chief Counsel, California Public Employees’ 

Retirement System, and John Shipley Senior Attorney, 

California Public Employees’ Retirement System for 

Defendant and Respondent